Deloitte’s Engelbert on the three trends changing the profession

Three significant factors are shaping the profession of the future, Cathy Engelbert, CEO of Deloitte, told a gathering of accountants recently: the impact of new technologies, new demographics, and new client demands.

“We’re living in a time of unprecedented change and innovation,” the Big Four firm CEO told the 110th annual meeting of the National Association of State Boards of Accountancy. “The future will evolve in ways we can’t even imagine.”

Driving that evolution will be three particular shifts: the way in which technology is reshaping how we work, the way in which demographics and innovation are reshaping the workforce of the future, and the ways in which the needs of investors and shareholders are changing.

The technology trend

“Accountants have been around for just about every technology change that’s ever happened -- starting with clay tokens thousands of years ago,” Engelbert said, but the coming changes are unlike any in recent memory, comprising what she described as “the fusion revolution -- the fusion of work and technology and biology.”

“The proliferation of advanced technology can fundamentally change how we do audits, conduct accounting and serve the capital markets,” she continued. “Now we have predictive analytics, automated workflow technologies. Last year was ‘The Year of Cognitive Tech’ at Deloitte,” with the firm exploring and innovating new ways to apply the technology to its work. “We’re doing better risk analysis. That is driving more real-time and forward-looking insight.”

“Imagine the day when technology allows us to audit 100 percent of a company,” she urged. “Imagine the day when robotics is used to automate manual tasks like invoice processing. That day is coming. It’s not totally here yet, but it’s not science fiction, either.”

And while some in the profession may be concerned about technology automating accountants out of work, she pointed out that the field has already undergone intense automation over the past 30 years -- and has only grown.

“Only one job out of the 200 listed in the 1950 census has been automated away. But the nature of jobs will change -- and new jobs will be created,” she explained, citing a study that says 65 percent of current grammar school students will have a job that doesn’t exist yet.”

What’s more, no matter how much work computers and software may be created to do, “Humans will still be necessary for empathy, curiosity, creativity, intelligence and more. These are the hardest things to automate and replicate,” she said.

Demographics and innovation

“The how, where and what of work is changing, and we need to adapt quickly,” Engelbert said, citing the rise of the “open talent” economy exemplified by Uber drivers and Airbnb owners.

Millennials -- who now make of up 60 percent of Deloitte’s workforce -- are much more willing to change jobs and to create their own pathways to success. “Younger, digitally connected workers are managing their careers much more intensively,” she explained, and the profession needs to support them. “How are we empowering our younger accountants? How are setting them up for success?”

Almost as important is the need to make accounting attractive. “We need to tell our story to younger and younger people -- and we’re not doing that very well,” she warned. “We need to get on the radar of college freshmen before they decide on their majors -- when they’re juniors and seniors in high school.”

“We have a dynamic, exciting profession -- we just don’t talk about it that way,” she continued, advising, “Whatever you find energizing about the profession -- talk to young people about that.”

Changing clients needs

Just as new technologies are reshaping how accountants work, the firehose of data that’s now available is changing what clients, investors and other stakeholders are looking for from accountants.

“The volume, velocity and veracity of information that’s coming out now makes for difficulties,” Engelbert said. “We need broader insights that go outside the bounds of the traditional financial reports.”

Citing a Deloitte point that found that businesses would pay more for an audit that included more information beyond traditional statements, she added, “Auditor’s reports need to include more information of value to stakeholders and investors. Already we’re seeing companies leveraging the kinds of information that CPAs can provide,” in the area of data visualization, for instance.

“What does the future of attestation look like? The breadth of information people are digesting is expanding rapidly -- and we can expand what we’re attesting to,” she said, but added that the profession must be careful in its approach. “We need to avoid the dangers of stifling innovation on the one hand, but also avoid the unintended consequences. There is huge demand for these services, and we don’t do a good job of explaining that CPAs can do these things.”

In the end, she concluded, accounting faces sweeping, unprecedented changes -- but they come with tremendous opportunities.

“We need to fuse talent and technology,” she said. “We can evolve this profession to much, much greater heights.”

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